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Deloitte analyses top trends for the technology industry for 2010

20 January 2010

 

Deloitte analyses top trends for the technology industry for 2010

  • Net tablets to challenge nascent e-reader market
  • Thinking thin is in again: virtual desktop infrastructures challenges the PC
  • CleanTech makes a comeback. But, solar stays in the shadows
  • The year of the user – IT procurement gets personal

The Technology, Media and Telecommunications (TMT) practice at Deloitte today announces its 2010 predictions for the technology sector, forecasting that 2010 will be the breakout year for net tablets. The connected portable devices are expected to offer a more appealing balance of form and function, and are anticipated to be purchased by tens of millions of people in the year ahead.


Mr Rajarshi Sengupta, Senior Director, Deloitte & Touche Consulting comments: “The rise of the net tablet could constrain the growth of the nascent e-reader market. For every million net tablets sold there will be a corresponding impact on e-readers. We also predict that in 2010 many enterprise purchasing decisions will be based more on the preferences of individual employees, rather than traditional IT department criteria.”

Deloitte also forecasts that Virtual Desk Infrastructure, a computing model based on thin or stateless clients, centralised applications and processing power, will be taken far more seriously than in previous years. An anticipated one million seats are expected to go thin client in 2010, with the largest deployments involving tens of thousands of seats. By 2015, thin client may reach 10 percent of all enterprise client devices.

The CleanTech sector’s performance is anticipated to be mixed, according to Deloitte. Although solar demand is likely to grow strongly in 2010 and 2011, some subsidy cuts and cheaper-than-expected electricity rates may prevent that growth from being as strong as some might hope. It is expected that the solar technology subsector will be outperformed by the broader CleanTech industry.


Mr Rajarshi Sengupta: “2010 will also see the world’s first laboratory scale carbon-negative cement plant delivering significant reductions in global CO2 emissions. In contrast, solar power technology could struggle in 2010 due to the cost of solar equipment, tools and raw materials, overcapacity and weak economics.


Thinking thin is in again: virtual desktop infrastructures challenge the PC
Deloitte predicts that in 2010 thin client will be taken far more seriously than in previous years, even if it does not outsell its thick client counterpart. Over the next five years, thin client should reach 10 percent of organisations’ computers, with the majority of medium to large businesses considering a shift to virtual desktop infrastructure. Thin client can help to deliver direct savings by minimising and making IT support and maintenance more efficient, as well as reducing hardware costs and licensing fees. There are other less tangible benefits to virtual desktop infrastructure including; mobility, increased productivity, lower real estate costs, lower power consumption and better security. Those charged with deploying thin client may need to convince workers who begrudge the lack of a local hard disk drive that pure forms of thin client entails. However, abetted by a backdrop of recession or slow recovery, employers may consider it a good opportunity to reshape working conditions.


IT procurement stands on its head
In the past, technology and telecommunications hardware and software manufacturers have targeted products to the enterprise market, specifically the gate-keeping IT department. In 2010, many enterprise purchasing decisions will be based more on the preferences of individual employees. With the rise of the ‘prosumer’ - employees who buy a phone for both work and play - more and more enterprises are likely to allow employees to choose their own phones, or at least allow prosumer-selected phones to integrate better with enterprise networks.


Enterprise-focused vendors will need to alter sales techniques originally designed to sell to monolithic buyers whose concerns were enterprise in scale. While IT departments will have to become more flexible, best practices are still necessary, such as deleting data on employees’ devices if they change jobs. Also, given the faddish nature of consumer sentiment, processes that reduce product churn will be needed. The future of many enterprise computing and telecom tools will likely involve compromises between work and personal life, that is, employees being available 24/7 but allowed to choose their own smartphone.


CleanTech makes a comeback. But solar stays in the shadows
After the CleanTech industry’s near-collapse during the economic crisis, government stimulus and investor interest has caused a sharp recovery. However, not all areas are sharing the bounty. Although the CleanTech Index is up 75 percent since its market lows, the view for the dominant solar technology -crystalline silicon photovoltaic (C-Si PV) - and its infrastructure is less positive in the next year or two. Currently, C-Si PV faces two challenges that could limit its recovery: overcapacity and weak economics.


Prior to the 2008 economic downturn, governments created a spike in demand for C-Si PV manufacturing capacity and installation. Capacity expansion continues unabated, largely in China and the United States. By 2010, over-capacity will mean C-Si PV utilisation will be barely above 25 percent. The economic crisis has also caused conventional energy prices to be lower than forecasted and some developers of PV installations are seeing payback on investment remain at around 15 to 20 years without subsidies. Consumers and utilities will benefit from the significant drop in PV silicon prices, making solar more affordable for those with longer-term investment horizons.


From grey to green: technology reinvents cement
In 2010, technology’s contribution to CO2 reduction could result in electric cars, more efficient airplanes and leaner data centres. Yet there is another largely-overlooked industrial segment that may deliver equal benefit: cement. Cement production represents about five percent of global emissions – almost double that of the aviation sector – but is an essential driver of economic growth.


2010 should see the world’s first laboratory scale carbon-negative cement plant, with an industrial scale plant expected in 2011. The total resulting reduction in global CO2 emissions and construction costs could be significant. The full benefits of carbon-negative cement could be realised after five to ten years, with sidewalks and driveways likely to be the first carbon negative constructions rather than skyscrapers.


Smaller than a netbook, and bigger than a smartphone - net tablets arrive
NetTabs, connected portable devices will be purchased by tens of millions of people in 2010. These devices have an advantage over smartphones - which are small for watching videos or web browsing - and notebooks, netbooks, and ultra-thin PCs, which are too heavy or expensive.

The likes of Apple and Microsoft teaming up with Hewlett-Packard, are anticipated to launch their products early this year, following news out of the Consumer Electronics Show in January 2010. Custom-designed tablets are also likely to be released by start-ups, some existing phone and PC makers, netbook leaders, and various smaller manufacturers using open-source phone operating systems.


Since netTabs are designed to connect wirelessly over WiFi, wireless carriers are likely to try to push users off cellular networks and onto WiFi as much as possible. NetTabs are also more expensive than most smartphones, and consumers are likely to demand big upfront subsidies.


Moore’s Law is alive and well in 2010
Despite forecasts of a gloomier scenario, Moore’s Law will probably work in 2010, with advances allowing for greater transistor density. However, this may not yield more powerful chips. Moore’s Law - the traditional ability of the global semiconductor industry to double the number of transistors in a square centimetre of silicon every 18-24 months - is not expected to come to a screeching halt in 2010, or even slow down.


The increased density is unlikely to be used to produce larger or more computationally powerful chips. Instead, “good enough” chips that are smaller, use less electricity and cost less money could emerge. With current growth of lower cost laptops and ultra low-cost netbooks, the next generations of PC chips are likely to be optimised for price, with consideration given to power consumption, but little focus on performance.


Other hot markets - smartphones, and perhaps tablets - will likely be optimised for power consumption, and possibly price, however, performance will be almost irrelevant. Although some chips will remain performance-driven, this segment may not see much growth. Many IT applications (server farms, etc.) are large users of electrical power, so more efficient chips are a good thing. New equipment that uses less electricity and requires less cooling may allow for re-architected or larger data centres without necessitating increased refrigeration or power supplies.


Notes
For a full copy of the report with all of the Deloitte predictions please email: malkumar@deloitte.com or visit the Deloitte  website

The 2010 series of Predictions has drawn on internal and external inputs from conversations with member firm clients, contributions from Deloitte member firms’ 7,000 partners and managers specialising in TMT, and discussions with industry analysts as well as interviews with leading executives from around the world.

About Deloitte
In this press release references to Deloitte are references to Deloitte Touche Tohmatsu India Private Limited (DTTIPL), a Company established under the Indian Companies Act, 1956, as amended.

DTTIPL is a member firm of Deloitte Touche Tohmatsu, a Swiss Verein, whose member firms are legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms.

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